'The government’s own figures suggest that the global defence export market in 2015 was worth a fraction under $100bn, a 17% increase on 2014.'

Nursing glasses of champagne and grazing on canapés, around 1,000 guests gathered one evening last month at London’s Science Museum for a lavish reception costing £105 a head.

As they swapped business cards and exchanged small talk, the multicultural crowd was oblivious to the small group of protesters chanting and waving placards outside. Instead they were intent on laying the groundwork for their industry’s premier international trade fair, which was starting the next day.

The Farnborough International Airshow is a hugely popular event with the public. Featuring drones, celebrity guests, simulators and flypasts, it is considered a great day out for families. But behind the scenes Farnborough doubles as a giant trade show for the world’s arms manufacturers.

About 100,000 people working in the defence sector attend the event which is run by UKTI DSO, the government’s arms exports promotional division, and which this year attracted 80 military delegations and was formally opened by David Cameron, then still prime minister.

Among those sponsoring the fair was the US defence contractor Raytheon, which claims to be “the world’s premier missile maker”.

Raytheon’s factories in Essex and Scotland produce the Paveway IV guided bomb which, according to its manufacturer, has been “put to the test in every major conflict” and proved itself “time and again, as the weapon of choice by the end users”.

One enthusiastic end user is Saudi Arabia, now the UK defence sector’s biggest customer, having agreed orders for £3.5bn of military hardware since the start of 2015. Saudi Arabia’s buying spree has been prompted, at least partially, by its intervention in neighbouring Yemen, where a coalition led by Riyadh is battling Houthi Shia rebels, backed by Iran, who have forced the country’s president, Abd-Rabbu Mansour Hadi, to flee. For months, evidence has been emerging from the rubble of Yemen that UK-manufactured weapons – including Paveway bombs – have been used in the campaign.

At the start of this year investigators from Human Rights Watch attended the sites of two bombing targets and found evidence that UK-manufactured weaponry – in one case a bomb, in the other a laser guidance kit – had been deployed. The nature of the targets – a chamber of commerce and a warehouse – appear to corroborate claims that the Saudis are targeting civilian infrastructure, a breach of international human rights law.

“It’s not just that the Saudis have used these weapons in Yemen: Human Rights Watch has determined that they have been used unlawfully and that the weapons used in the strikes were UK-produced,” said Kristine Beckerle of Human Rights Watch. The organisation has become so frustrated by the government’s refusal to acknowledge how UK weapons are being deployed in Yemen that it is releasing a video highlighting the impact they are having on a conflict in which at least 6,000 people have died.

However, in statements to parliament the Foreign Office has insisted that “the MOD assessment is that the Saudi-led coalition is not targeting civilians”, and that “there has not been a breach of IHL [international humanitarian law] by the coalition”. Saudi Arabia, too, denies claims that its military coalition is targeting civilian sites. But the denials from both camps are unravelling.

Having corrected its statements to parliament, the government is now under pressure to acknowledge that it has also misled the high court in relation to a case being brought against it by the pressure group Campaign Against Arms Trade, which accuses it of failing to ensure that arms exports to Saudi Arabia are not in breach of international humanitarian law.

“The corrections are staggering,” said Andrew Smith of the campaign. “At best the government has been extremely negligent and careless, and at worst it has acted to mislead parliament and the court. Either way it has serious questions to answer and must make clear what it will do to ensure this never happens again. The stakes could not be higher: UK fighter jets are flying over Yemen and people are dying from UK bombs.”

The Saudis, too, now admit mistakes. A commission set up by the kingdom has concluded that the coalition was guilty of “mistakenly” hitting a residential compound in the Red Sea port city of Mokha – an incident in which at least 65 civilians died. It also acknowledged that the coalition was responsible for airstrikes on a hospital run by Doctors Without Borders, which it claims was being used as a rebel hideout.

The Liberal Democrat foreign affairs spokesman, Tom Brake, said the UK needed to rethink its policy on Saudi arms exports. “There is such an overwhelming body of evidence that the Saudis have committed breaches of international humanitarian law in Yemen that the UK government can no longer rely on their rather weak reassurances, and should instead initiate their own review to confirm, in my view, that there have been breaches which would require them to stop arms sales to Saudi.”

But this would be a disaster for the British defence sector, where business is booming. Newly published official figures reveal that the UK won defence orders worth £7.7bn last year. It now has about 12% of the global defence export market and, over the last decade, has shored up its position as the second largest arms exporter in the world.

There is still much to play for. The government’s own figures suggest that the global defence export market in 2015 was worth a fraction under $100bn, a 17% increase on 2014.

As the market has expanded, successive governments have gone to extraordinary lengths to promote the sector. Tony Blair intervened to prevent an investigation into arms exports to Riyadh; Cameron assiduously courted Saudi royalty; earlier this year the defence secretary, Michael Fallon, led a UK delegation to Qatar to promote sales of the Eurofighter jet.

The Middle East is considered by the government to be a priority market. Two-thirds of all arms exports go to the region. In the last two years the UK has agreed arms deals worth £388m with the United Arab Emirates, £170m with Qatar, £120m with Oman and £24m with Bahrain.

Other countries with questionable human rights records have also become major customers. In the last three years the UK has sold £450m of arms to Turkey, despite its increasing authoritarianism and political instability, and £116m of weaponry to Egypt, despite its recent coup and worsening human rights situation. It has also signed major contracts to supply missiles to Malaysia and Thailand.

Brake suggested that the government’s failure to monitor the impact UK weapons were having in Yemen undermined any assurances it could give that they were not being used elsewhere in breach of international human rights laws. “If similar breaches of IHL involving the use of UK arms in another theatre of conflict occurred, there is no reason to believe that the UK government would adopt a more proactive stance in relation to those breaches.”

A Foreign Office spokeswoman defended Britain’s position. She said the UK had “one of the most robust arms export control regimes in the world” and could revoke licences quickly if circumstances changed, as had happened in the cases of Libya and Yemen.

“The key test for our continued arms exports to Saudi Arabia in relation to international humanitarian law is whether there is a clear risk that those weapons might be used in a serious violation of IHL,” she said. “The situation is kept under careful and continual review.”

But Smith questioned the government’s assurances. “The arms trade could not function without the active support and participation of the UK government,” he said. “Time and again it has shown that it will stretch to any length, and sink to any low, in order to promote arms sales to some of the most repressive regimes in the world.”

KEY CLIENTS FOR UK ARMS

IsraelThe UK licensed £82m of arms to Israel while David Cameron was in office. The government acknowledged UK arms had “almost certainly” been used in bombarding Gaza in 2009, in a conflict that saw both sides accused of war crimes.

TurkeyIn the last three years the UK has licensed to Ankara almost £450m of arms, including components for military aircraft, helicopters and targeting equipment. In the past year the Turkish military has been engaged in a ferocious conflict with the country’s Kurdish minority.

EgyptSince the military coup in July 2013, the UK has licensed more than £115m of arms, including machine guns and assault rifles, as well as a £40m licence for combat vehicles. In 2011, Cairo used UK-provided teargas against protesters.

BahrainSince the Arab spring, the UK has licensed £50m of arms, including hundreds of machine guns and thousands of assault rifles. Last February, Bahraini security forces were accused of quashing pro-democracy demonstrations using teargas and water cannon.